My 13 Favorite Alternative Funding Options

This has been a big year for advances in business funding. The JOBS Act opened doors for major innovations in crowdfunding, and dozens of new funding websites have popped up to address the needs of specific types of businesses. Whether you’re a nonprofit, a new small business, a high-tech startup, or an up-and-running company, and whether you’re looking for a loan or a grant or an equity-sharing arrangement, there is an option for you.

If you’re looking for a grant…

1. Indiegogois a free-to-join site that hosts fundraising efforts made by pretty much anyone with an idea to pitch. You build a campaign by creating videos, telling your story, participating in social media promotion, and offering “perks”, which are goods or services that you offer in exchange for donations. You can keep whatever money you raise, even if you don’t meet your fundraising goals (the site takes a commission on your earnings, and a higher commission if you don’t meet your goal).

2. RocketHub is another free-to-join site that allows you to keep whatever you raise, even if you don’t meet your fundraising goals. RocketHub also recently partnered with the TV channel A&E for marketing and funding help for their favorite fundraising campaigns.

3. Peerbackers is very similar to Indiegogo and RocketHub, but only allows you to keep the funds you raised on the condition that you can still fulfill the rewards you promised your backers.

If you’re a non-profit…

4. Razoois a fundraising platform designed exclusively for nonprofit organizations and causes. It’s free to join, and open to both established charity organizations and individuals fundraising for personal causes. If you’re a nonprofit, the donations made to you are tax-deductible, which is a major benefit in soliciting donors for larger donations. The site’s commission for nonprofits is pretty low, too—a flat 4.9 percent (for individuals raising for personal causes, the commission is higher).

5. CrowdRise is similar to Razoo, and also offers tax-deductible donations. However, here there are no personal cause fundraisers, and there are tiered membership options beyond the basic free account. CrowdRise also has more celebrity endorsements and seems to get more media attention than other sites like it.

If you’re raising money for a product or project (like an expansion)…

6. Kickstarter is arguably the best-known crowdfunding site out there. It is project-based, and your campaign is pre-screened by Kickstarter before it’s featured on the site to ensure that you are indeed raising money for a project, which can make it difficult to launch a campaign here. You must offer a product in exchange for the donations you receive (a popular choice is to offer the product you are raising money to produce), and you can’t keep the money you raise unless you reach your fundraising goal on-time.

Note: Peerbackers is also designed to promote specific projects or products, but differs from Kickstarter in that it allows you to keep the funds you raise even if you don’t meet your fundraising goal, on the condition that you can still fulfill the rewards you promised your backers.

If you’re looking for a loan…

7. Prosper positions itself as an alternative to traditional bank lending. Loans are unsecured, and can range from $2,000 to $35,000, with terms of 3 to 5 years and fixed interest rates dependent on your Prosper Rating. The site offers very structured loans rates and terms, both for borrowers and for investors, and even does a “soft” credit check (this does not impact your credit score) on borrowers to help determine your Prosper Rating, which is displayed on your profile along with the story, videos, photos, and requested amount of funding—the kinds of information typical of other crowdfunding sites. Investors then use your profile to determine whether they want to fund your request for a loan.

8. Kabbage offers short-term cash advances between $500 and $50,000 to small businesses. There is no crowdfunding aspect to this site; Kabbage itself is the one and only lender. That makes the process faster—you can apply for and receive a loan in just minutes—and gives Kabbage the freedom to assess your “creditworthiness” on its own terms. Instead of looking at your credit score or asking you for your business’s detailed financial statements, Kabbage asks you for your UPS, PayPal, Amazon, Square, eBay, and/or Quickbooks accounts, and then uses the data it gathers from those accounts to determine your sales revenue and cash flow itself. Kabbage also takes a look at your social media accounts to get a more complete picture of your business. Of course, only businesses that utilize the services Kabbage analyzes are eligible to apply for a loan here.

9. Kiva is a non-profit organization that partners with microfinance institutions (Kiva’s “field partners”) in third-world countries to offer small loans to budding entrepreneurs. Potential borrowers can search through Kiva’s field partner listings to get started wherever they live. And recently, Kiva launched Kiva Zip: a new spin-off that cuts out the middleman (the microfinance lender) so individuals can lend directly to entrepreneurs—more like the standard crowdfunding model. Currently Kiva Zip is only available only in the U.S. and Kenya. From their website:

While microfinance has helped millions, many people have been left out: Think remote rural villages in Kenya or recent refugees with no credit history in the United States. By making lending easy on the internet, and tying loans to borrowers’ characters rather than their credit scores, Kiva Zip aims to reach the world’s most marginalized entrepreneurs with the financial tools they need to succeed.

If you’re looking for an equity-sharing arrangement…

10. EarlyShares is a pretty sophisticated fundraising platform looking to compete with traditional venture capital firms. They have a stringent screening process with many requirements for approval—an experienced management team, a sizeable market, a business plan complete with financial projections, and satisfaction of their due diligence process—but the payoff is in the potential of hundreds of thousands of dollars of funding. It is free to submit your business for consideration, and a wide range of businesses—everything from media to real estate to consumer goods to software—are desired.

11. MicroVentures is very similar to EarlyShares, but with an explicit focus on tech companies. Companies in need of $100,000 to $1 million are able to raise funds here.

If you’re interested in angel investment…

12. CircleUp is an angel investor site dedicated exclusively to entrepreneurs with retail and consumer goods businesses. There is a pre-screening process, which separates approved companies into either CircleUp (typically companies with $500,000+ revenue in the previous 12 months) or CircleUp Seeds (for earlier-stage companies). You can offer potential investors equity or convertible debt.

13. Gustis like a Match.com for entrepreneurs and angel investors. Both entrepreneurs and angel investment groups create Gust profiles, and Gust helps match entrepreneurs with investors that are in their region or industry. Thousands of angel investment groups use Gust as a tool for vetting prospects, and it is free for entrepreneurs to join. You create a simplified public profile as well as a more detailed profile (with documents like your business plan and financial statements) that you only share with investors you choose to show it to.

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Caroline is a two-time technology entrepreneur. She's co-founded and held the CEO position for two internet companies, OsoEco (social bookmarking/shopping site) and RealLead (mobile marketing for the real estate industry). Follow Caroline on Google+.